When 'price' costs you an account
An insurance agency recently called me for help because it just lost its largest account after 24 years. When I asked how that happened, the clear, confident response was, “Price!”
But that may be a convenient excuse. Here are three reasons why that may not be true, and what you can do about it.
(1) People don't change for the sake of changing, especially if they've been with you for a long time.
The only way a long-term customer will change is if it sees significant pain in staying with you and significant benefit in moving. You blew it somewhere. Somewhere you dropped the ball related to the relationship, value or both.
Possible solution: Get into that account and do anything to save it. Find out why you lost it and correct the problem with your remaining accounts.
(2) If someone's price is significantly better, there's a reason, and you'd better make it clear to the customer because they could be in danger.
There's no way someone can deliver a superior product or service at a much lower price. If someone is 33 percent cheaper (use that word when referring to the competition), you're selling apples while they're selling oranges.
Possible solution: Assuming you have a strong relationship with the customer, scare them. Raise doubts about what they're expecting.
(3) You didn't lose this customer overnight.
It's probably taken several years.
Solution: You need to make changes, most likely significant ones, to how you deliver value and build long-term relationships.
If you do have a "price problem," here's how to come to grips with it:
• Accept that only about 7 percent of people buy primarily on price. Until you accept this fact, you'll never be able to overcome the price problem. Your market isn't different and the people you're dealing with aren't different. The top-performing companies and salespeople are always selling more expensive products to those who supposedly buy on price.
• Selling on price is the surest way to go out of business. There can only be one low-price provider. If you are it today, you won't be it tomorrow or when your customer is shopping the next time. There will always be someone willing to sell something cheaper and, in some cases, give it away. Low price cheapens the marketplace and destroys loyalty, trust, credibility and relationships. Competing on price will ensure both you and your business live a shorter, more painful life. The solution is to get great at building relationships and value.
• The first sale is to yourself. If you don't believe in your product and the price you're asking for it, you either need to find that belief or leave your company and work for the low-cost provider.
John Chapin is a sales and motivational speaker and trainer, based in Auburn. Visit his website, www.completeselling.com, or contact him at johnchapin@completeselling.com.
WBJ Web Partners
Most Recent
Most Recent
0 Comments